The Internet of Things (IoT) helped generate $217 million in revenue for Verizon Communications during the third quarter, a gain of 24% from a year earlier, with telematics accounting for most of that revenue. That’s according to John Stratton, Verizon’s executive VP and president of operations who spoke last week at Wells Fargo Technology, Media & Telecom investor event. Stratton predicted that Verizon would soon surpass $1 billion in IoT-based revenue per year.

So in the case of IoT, we see that the transport layer typically — analyst projection, folks like you would say 7% to 10% of the value would be found in the connection network layer. I look at those as sub-$1 ARPU. Fine. I will take it. Great cash flow. Highly profitable. But when I stack the services, my yields from those customers on the fleet side, on the OEM automotive side, dramatically higher, 10X, 15 times, 20 times with great margin potential.So as we think about our media investments, our telematics investments, things that we are doing in IoT in places like smart cities, what’s most important I think is the layer of connectivity between each of those tiers.

On the acquisition of XO Communications and leveraging the combined companies fiber plant, Stratton said:

When we first announced our intent to acquire XO, it was first seen as a fiber buy and it was before fiber was super sexy. So February of 2016 was a little bit earlier than some of the stuff that’s been going on lately and then people came around and said, oh, okay, we see it, it’s the spectrum assets that are maybe more interesting to Verizon.

Well, the fact is they are both really interesting and we love the spectrum for what it will enable us to do in the context of 5G, but, similarly to your question, the importance of those metro rings — top 50 cities, there’s good infrastructure in 45 of the top 50. If you think about what we used to call Verizon Business, but the long haul and metro assets that we have on that part of the business, it’s a really very nice complement. And the amount of fiber that Verizon has deployed in the US is dramatically higher than any other carrier.

Even before you get to 5G, the case around what we call One Fiber is extraordinarily compelling. So just the soul densification of the wireless network — if you look back, I (Verizon) have 55,000, 56,000 sites today — if you went back six, seven years ago, I had like 30,000 and if I look forward, I will have 100,000.So the fact is the largest wired networks in the world are going to be wireless networks. It’s just the nature of it. And so when I look at what’s required to serve my customer base for 4G LTE and then I combine that with the other fiber dependencies in the other parts of the business, even before I get to 5G, I have a very, very compelling case where I can take those capital dollars and for a minor incremental investment create new market opportunities. And this is the thing that we are really focused on.

And so as I think about where I’m deploying my wireless network, where we will be densifying that wireless network, what else can I do with that common fiber is a big deal.

In closing, Stratton said Verizon’s IoT business was growing at a 24% rate:

The IoT business that we see growing now at 24%, we see that stimulated even further through some of the actions and the acquisitions we’ve done there. But back to the fundamentals, from a top-line perspective, we are very confident in terms of our wireless business. We really love the position we are in in the industry broadly and then our space in it. It should be a good year for Verizon.